Posted by Leonard Steinberg on February 29th, 2012

Google it! A new Starbucks on the street corner used to be the most important signal of a gentrifying neighborhood. Well, Starbucks has been in West Chelsea for quite a while and there are several. So what could be the most important next signal of an even greater neighborhood escalation? Google it!

Lets face it we Google everything else, if its for the correct spelling of a word, or whether the news headlines announce whether Rick Santorum will be the GOP candidate….  Google’s expansion in New York, and especially in West Chelsea—once seen as too expensive for tech start-ups—has helped fuel a perception that the city is in the midst of a technology industry boom. Facebook, Hewlett-Packard and other companies have expanded their New York presences, and Cornell University will be building an engineering campus on Roosevelt Island. When Google bought the Port Authority building at 111 Eighth Avenue for $ 1,9billion, that was the ‘Starbucks-indicator’ to let us all know the neighborhood would continue upwards and not stop. Such a huge investment in the building was also a huge message about the neighborhood: Google’s young, educated workers would be happy in a neighborhood like Chelsea for all the reasons we love it.

Almost every part of the economy involves the tech sector these days: There is no industry in which New York is a world leader where technology doesn’t play an important role and won’t play an important role going forward. Google being centered in Chelsea is a boon for the neighborhood, now employing over 2,700 people. That is 2,700 new consumers in the area, seeking food, shelter, nightlife, entertainment, etc. And many are very well paid.

Google has cemented its status in New York since 2000, when a one-person ad-sales team began working out of a Starbucks on West 86th Street. Two years later, it had moved to an office in Times Square with around 70 employees before moving to its Chelsea offices at 111 Eighth Ave. in 2006. Although Google’s engineering efforts are still driven out of its California headquarters, the New York office is now a powerhouse for both its engineering and advertising work force. Thats a lot of highly paid people. And developers in the area have taken note. Several buildings are coming to the neighborhood that specifically address this audience, to add to the already strong mix including the Caledonia, 456 West 19th Street, 100 and 200 Eleventh Avenues, 520 West 19th Street, 245 Tenth Avenue, and so on. Google offices are notoriously energized, fun, stimulating spaces designed to keep happy employees working very long hours…..this should also be factored into how they would expect to live at home.

Developers of luxury New York real estate should recognize the impact of this sector on the buying and renting demographic. Too often their expectation is that Wall Streeters are the target market. West Chelsea is different.